Does Bush or Obama Deserve Credit for the Banking Fix?

So the capital markets are largely fixed (I plan to post a Spread ‘Em column shortly). Who deserves credit for the cure, the Bush administration or the Obama administration?

I asked this exact question to Brookings Institution fellow Douglas Elliott today during an online Q&A on the Washington Post website.

His answer: “I don’t know how to allocate the credit for curing the financial markets, so I won’t even try.”

So much for that.

Elliott was an investment banker for two decades, principally at J.P. Morgan. He was president and principal researcher for the Center on Federal Financial Institutions. He focuses on issues surrounding both public and private financial institutions.

As a former JPM guy, Elliott was asked: “Behind many financial losers, there is a financial winner dancing with happiness. Didn’t J.P. Morgan wind up a big winner when Bear Stearns was sold?”

Elliott: “As a former J.P. Morgan employee I agree that Management was very happy to have the opportunity to acquire Bear Stearns at what seemed like a fire sale price. On the other hand, there were a lot more losses on the assets than I think Morgan anticipated. I expect they’ll be happy in the end to have done it, but it’s still early to tell.”